Gold Technical Outlook

Gold prices continue to trade within the range of $ 1270 and $ 1350 but the current price action suggest that the bulls are in control and testing to take out previous high of $ 1347. A break above will give more rooms of short covering and we will not be surprise to see that the Bears will try hard to defend this position. The picture remains muddy as it seems that gold bulls could run out of energy while the recent rise in price was due to short covering. Strong physical demand is still the main driver that supports the price. Our main worry is that the larger trend remains down and this bout of short covering rally could soon be over. A downward resumption looks more likely until we see a clear break of $ 1350